Parc Condominiums Building IV Building V Restoration of all Potable Water Distribution Piping Page 10f25 Date: June 17, 2008 Contractual Agreement between Parc Condominium Association and Texas Drain Technologies, Inc. Project: RESTORATION OF ALL POTABLE WATER DISTRIBUTION PIPING Parc Condominiums Building IV Building V 3600-3614 Montrose Blvd Houston, Texas 77007 PARTIES TO THIS CONTRACT ARE AS FOLLOWS: Owner: Frank Cario, General Manager Paro Condominium Association 3614 - 3600 Montrose Boulevard Houston, TX 77006 Phone: 713.529.3863 E-mail: managerparc@amitx.com Contractor: Texas Drain Technologies, Inc. 954 Wakefield Dr. Houston, TX 77018 713-697-2088 (phone) OTHER PARTIES NOT A PART OF THIS CONTRACT ARE AS FOLLOWS: Owner's Representative: Gerald Roy Spencer, P.E. Spencer Engineers, Inc. 4635 Southwest Freeway - Ste. 900 Houston, Texas 77027-7104 713 621 2482 / gspencer@spencerae.com Contractor's representative: Mr. Gary Gould (713) 697-2088 Texas Drain Technologies, Inc. 954 Wakefield Dr. Houston, TX 77018 Owner's Attomey: James R. Young (713) 510-1000 Holt & Young, P.C 11200 Richmond, Suite 450 Houston, Texas 77082 Contractor's Attorney: Robert McCabe at 713-652-9700 Holm, Bambace and McCabe 1010 Lamar Ste. 1100 Houston, TX 77002 Total Contract Amount: _ $1,687,576.00 (without applicable tax)Parc Condominiums Building !V Building V Restoration of all Potable Water Distribution Piping Page 2 0f25 Date: June 17, 2008 Pare IV Building Total Amount $808,008.00 - Phase 1 Pare IV Building Refurbish Piping Amount $754,400.00 Parc IV Building Bond estimate $ 7,000.00 Parc IV Building New Faucets Amount $ 22,320.00 Parc IV Building Demo / reconstruction $ 24,288.00 allowance cost plus 10/10,(asbestos abatement only), see addendum #1 calculated for 3 locations Pare V Building Total Amount $879,528.00 - Phase 2 Pare V Building Refurbish Piping Amount $824,060.00 Parc V Building Bond estimate $ 7,000.00 Parc V Building New Faucets Amount $ 24,180.00 Parc V Building Demo / reconstruction $ 24,288.00 allowance cost plus 10/10,(asbestos abatement only), see addendum #1 calculated for 3 locations. Allowance line items represent items verified and billed by invoice or per tub valves installed. Backup documentation provided. CONTRACT CONDITIONS 1, SCOPE OF WORK: The Contractor shall provide the ACE DuraFlo® pipe restoration process to all of the potable water piping in each of the two existing condominium buildings, or replace some of the existing potable water piping with new piping at the contractor's option. This includes restoration of all potable water piping, including the removal of all dead end pipes discovered during the normal restoration process, the removal and replacement of all hammer arrestors that are discovered during the normal restoration process, Discovery activities will be confined to all public areas and Laundry room. This also includes restoration of all re-circulating hot water piping. a. File for, apply for, pay for and obtain all construction and repair permits as required by the local authorities. b. Field investigation has determined that there are no air chambers or hammer arrestors in the typical residential unit potable water supply piping at each typical unit fixture or group of fixtures. There may be other hammer arrestors and/or air chambers at the fixtures in other areas, and these items will be addressed with contract modifications for eliminating these conditions when and if they are discovered. c. The principal objective of the piping restoration process is to clean the inside of the piping system and provide an epoxy barrier coating material on the inside of the piping to provide a barrier between the piping material and the water flowing through the pipes so that the basis of corrosionParc Condominiums Building IV Building V Restoration of all Potable Water Distribution Piping Page 30f25 Date: June 17, 2008 (water to metal contact) is essentially eliminated, and that pinhole pipe leaks are sealed and prevented from further leakage. Site Description. The facility consist of two 12-story buildings, (Parc IV and Parc V), Parc IV is a 43+-year-old Condominium building located at the address noted above. The facility consists of a 12-story building with ninety-six (96) units, each with a kitchen and bathroom(s), and common areas. A total of twenty-eight (28) risers, one-hundred-forty-four (144) bathrooms, ninety-six (96) kitchens, plus main line(s). Pare V is a 43+- year-old Condominium building located at the address noted above. The facility consists of a 12-story building with one-hundred-eight (108) units, each with a kitchen and bathroom(s), and common areas. A total of thirty (30) risers, one-hundred-fifty-six (156) bathrooms, one-hundred-eight (108) kitchens, plus main line(s). Piping System Description. The piping system consists of primarily galvanized steel pipe, with some sections consisting of a combination of copper pipe. The galvanized steel pipe is experiencing pinhole leaks and deterioration due to the effects of water corrosion and erosion. The pipes servicing the facility range in size from 1/2 inch to 4 inches. The hot water re-circulation system is included in the scope of work, Plumbing Fixture Inventory. Parc IV has a total of one-hundred forty-four (144) bathrooms and ninety-six (96) kitchens and Parc V has a total of one-hundred-fifty-six (156) bathrooms and one-hundred-eight (108) kitchens. Each Water Closet is a tank type flush unit with a 1/2" flexible supply, each bathroom lavatory is a self-rimming china oval countertop fixture, and each shower has a manually controlled mixing valve with diverter trim. Protection of Existing Services. Contractor represents that it is not necessary to install any additional water bypasses to provide water services to other areas of the Subject Property that may be affected by a water shutdown during completion of isolations or completion of the Work, other than the collection headers at the bottom of the potable water distribution risers and the re-circulating hot water header above the top floor ceiling, Specific consideration shall be given to establishing a work schedule that seeks to minimize water service interruptions to the ‘occupants of each unit, without adversely impairing the timely completion of the restoration work. During the restoration of the main distribution lines temporary and permanent provisions will be installed to minimize down time to units. The Contractor will locate the various main isolation valves prior to the restoration crew setting up on site. The restoration team will focus on a specific portion of the building each week ‘commencing Monday morning at 8:00 am to Friday afternoon at 5:00pm, Most workdays will consist of 8-10 hours. Some fluctuation of business hours may be required and will be addressed on a case-by-case basis,Parc Condominiums Building IV Building V Restoration of all Potable Water Distribution Piping Page 40f25 Date: June 17, 2008 with the owner. The contractor shall strive to have each and every unit served with Hot and Cold Water all day on Saturday and Sunday h. The contractor shall include the addition of eight 1" hammer arrestors on each tower with isolation valves. Locations shall be at locations on the potable water headers that are mutually agreed upon by the owner and the contractor. i. The contractor shall re-design the circulating hot water system to increase the circulating water flow in each riser. The main header shall be increased to 1-1/2". The existing pump shall be replaced with a new Bell & Gossett model NRF-45 Speed 1 flanged to 1-1/2". Provide circuit setters and other means for water balancing the circulation to each return riser connection. 2. GENERAL PROCESS DESCRIPTION: The Contract Scope of the Work (SOW) includes pipe restoration by epoxy lining of the piping from the main supply pipes at the lowest level up to and including the branch supply pipes to each of the plumbing fixtures on the property and all of the circulating return hot water piping on the property. The SOW shall include the following: a. Provide new parallel cold-water headers, hot water headers, and circulating hot water headers at the lower and/or upper level riser connection of each riser with a separate valve for each riser. Connect each newly restored piping riser to the new replacement header. b. Provide additional planning to assure that each unit will be without water for the shortest practical time. ¢. Isolate and drain all of the potable hot water, cold water and re-circulating hot water pipe systems at each building riser. d. Use Dry Air and Aluminum Oxide mixture to shot blast clean the inside of the affected piping in accordance with UPC standards. e. Restore all of the potable water piping with a two-part epoxy compound meeting applicable ANSVAWWA (210-97 standards, and ANSI/NSF Standard 61. The barrier coating shall be applied in a thickness of no less than 4-mil. This shall be referred to as the “coating process” part of the pipe restoration. f. All piping shall be flushed, and cleaned by a 1-hour water flush with fresh water after the epoxy has obtained its inital set. g. After the epoxy has obtained its initial cure, the piping shall be air pressure tested at one and one-half times the working pressure to assure no leaks exist in the newly lined piping system. After the air test, the piping shall be hydrostatically pressure tested at one and one-half times the working pressure to assure the pressure integrity of the leaks no longer exist in the affected piping system. h. Replace, relocate or add, as applicable, isolation valves in the newly lined piping system with valves of equal or better type. Also add new isolationPare Condominiums Building IV Building V Restoration of all Potable Water Distribution Piping Page Sof 25 Date: June 17, 2008 valves at the top and bottom of each Hot Water, Cold Water, and Re- circulating water riser that serves each stack of similar apartments. i. Provide all new shut off valves and supply tubes to each of the existing fixtures, icemaker and dishwasher. j. Provide identification labels on all lined piping at all access points, at each valve, and at other visible locations. 3. DEFINITION OF THE WORK: The Work more specifically includes restoration of the hot and cold domestic piping systems and other civil work. a. Contractor will isolate the hot water piping system at the junction of the main supply line and the vertical risers, applying the process to each of the risers and each of the branch lines. b. Contractor will isolate the cold water piping system at the junction of the main supply line and the vertical risers, applying the process to the each of risers and each of branch lines. c. In the tub/showers, the cold and hot potable water systems will be accessed by removing tile and under lament from the tub/shower wall, or by removal of the Gypsum Wall Board (GWB) from the wall behind the shower as required for access to the pipe/valve connection for potable water pipe restoration. This will usually be an approximately 14" by 18" access area. A fair amount of dust will be generated, and every effort will be made by the contractor to contain dust to immediate work area, However, each individual owner shall plan on some cleaning, at the individual occupant’s expense, as needed during the restoration process and after the restoration process is completed. If access to shower piping through a Gypsum board wall is deemed to be the most appropriate for access, the disturbed area will be covered with a standard plastic access panel screw attached to the GWB. This is will be satisfactory if access is through a closet. If access is other than through a closet, contractor will repair the drywall, tape and float the GWB at no additional charge. The individual owner will be responsible for texturing and painting the repaired GWB area. If access through the tiled shower wall is deemed appropriate, contractor will remove appropriate number of tiles and replace tiles after completion of pipe restoration. The cost per tub/shower included into the contract is for standard 4x4 white ceramic tiles on drywall backing as originally constructed. For non-standard ceramic tiles and/or conerete/wire backing the labor cost contract increase per tub/shower will be $563.00 for each shower plus the cost of replacement tiles. d. Contractor will take every precaution not to damage and subsequently re- use the tile on the shower walls. However, contractor cannot guarantee that every tile removed will not sustain some kind of damage such as cracking, chipping, etc.) In the event that said tile is damaged, contractor will not be responsible for supplying or matching existing tile. Owner will be responsible for the cost of such tile.Parc Condominiums Building IV Building V Restoration of all Potable Water Distribution Piping Page 6 of 25 Date: June 17, 2008 e. Contractor will apply the process to remaining hot and cold main riser f distribution system beginning at the mechanical room main distribution headers to the hot/cold risers and the circulation hot water collection headers or shall replace this piping with new Type K copper piping, or similar. The Contractor shall provide protection of surfaces, Formica countertops, marble, floors, tubs/showers, walls, stairs, hand railings, ceramic wall & floor tile, carpets, Vinyl Floor tile, plumbing fixtures and all other similar items as required to prevent any physical damages. Valve Replacements. * Allexisting valves that are in line with the piping to be restored will be removed and replaced with new valves. This excludes valves that are not visible, not readily accessible, or in unknown concealed locations. ‘+ All new vaives and piping installed as part of the work shall be of high quality Brass with 150-psi WOG ratings. All new (replaced) piping shall be schedule 40 galvanized epoxy lined steel pipe or type K copper pipe, of the same size as the existing piping or larger, and di-electric unions or di-electric couplings where different pipe materials are connected. + Existing pressure reducing valves shall be removed for the pipe restoration process and then re-installed and re-adjusted for proper operation after pipe restoration is completed. * The piping will be reconnected using unions, brass or other approved fittings and new full size isolation valves. ‘+ The existing shower valves are required to be removed andlor to be replaced as a part of this contract. The contractor shall replace each and every shower valve that is removed with a new brass body pressure balance shower valve type built-in integral stopcocks. (The individual unit owner is allowed to elect to pay the Contractor to install a different but similar approved shower valve, but this separate transaction is not a part of this contract.) * All angle stops will be replaced in the course of the restoration with new angle stops, new chrome escutcheons, and new approved supply tubes or flexible hoses installed from the angle stops to the fixtures, to the icemakers, and to the dishwashers. «New full size gate or ball isolation valves shall be installed at the access points (isolation points) for each of the hot and cold pipeline risers, where the circulating hot water header collects the circulating hot water, plus other locations necessary for isolation of potable water to the individual stacked units. The valves shall be located where applicable or agreed between Owner and Contractor. * Any additional valves that need to be installed expressly for the purpose of making the isolation to facilitate the restorationParc Condominiums Building IV Building V Restoration of all Potable Water Distribution Piping Page 7 of 25 Date: June 17, 2008 process or to keep individual occupant with water service is included in the contract, including any present ceiling valves in tenant improvement areas, make up water valves, and trap primer valves, * Any other additional valves are not included in the Contract. If any other valves are later determined to be necessary or desired by Owner, the installation of those new valves will be installed as. a Change Order to the Contract. 4, DEMOLITION & REPAIR WORK: In the event that demolition and repair work should become necessary as part of performing the Work, (for example a section of wall needs to be opened up to access and replace pipe or for repair work), the contractor will be responsible for structural and/or cosmetic repairs necessary to return the affected area to drywall status only. Any additional expenses incurred to paint, texture, finish, wallpaper or otherwise repair the affected area to match the previous condition will be performed by a change order to the contract or shall be performed by the Owner. To the extent the Contractor affects any fire separations during the course of the Work, the Contractor shall ensure the integrity of all existing fire separations be restored once the SOW is completed in the affected area. The following items are specifically excluded from the Scope of Work: except where these items are damaged by the contractor: a. Cold or hot water storage tanks, existing lavatory and kitchen sink faucets, plumbing drain traps, or fixture replacements. Sanitary waste, drain, vent or storm drainage systems, the entire fire suppression system, irrigation piping, any trim upgrades (except for shower mixing valves), wall, countertop and flooring materials, bathroom tile and fiberglass wall material and installation except for at shower tub mixing valves. b. Asbestos, lead, or other hazardous material removal, risk reduction, abatement and any patching and repairing of wall or ceiling damage for such environmental work. Except as to the coordination of work provided by owner approved abatement and consulting company, as set forth by section 10, paragraph O only. c. The needs to move, relocate, disconnect, and re-connect or cleaning of air handlers, vents, blowers or other mechanical related items are not a part of the scope of this contract. 5. CONTRACT PRICE AND PAYMENT: a. The Total Contract Price, which includes any and all fees, permits and licenses arising out of performance of the Work, is $1 687,538.00 b. The Contract Price is to be paid on the following terms: * 10% upon Execution of the Contract, and 50% of this amount shall be non-refundable in the event of contract termination. * Upon Contractor's providing a progress report each month with invoicing occurring on a monthly basis. The Total amount of the invoice will be based upon the proportional number of connections and/or risers completed, minus twenty (20%) percent